If your employment strategy is to hire desperate people, you’re in trouble

Yesterday I heard about an employer who boasts about deliberately hiring down-on-their-luck knowledge workers. The workers are offered low wages (monthly, not hourly), appalling insecure contractual terms and are bullied into working long hours and performing ethically dubious tasks. The conditions are borderline Dickensian.

From a worker’s point of view, it’s a nightmare. The manager thinks he is being clever. And in the short term he may be. But it’s a dumb strategy:

• First, despite everything, while some workers are desperate right now, most  still have options. Exploited workers will move on at the first opportunity. So an exploitative employer in any knowledge-based industry can expect to have an unstable workforce and be constantly getting new workers up to speed.
• Second, the recession isn’t going to last forever. Sooner or later there will be another skill shortage. In fact there are already signs of this in Australia. Employers with an exploitative reputation will struggle to find anyone willing to work for them. This applies to companies and to exploitative individuals.
• Third, having downtrodden workers impacts on other staff. Those who can will ask themselves “is my turn next?” Staff will options will bail out.

As the headline says, If your employment strategy is to hire desperate people, you’re in trouble.